TY - JOUR
AU - Goda,Gopi Shah
AU - Shoven,John B.
AU - Slavov,Sita Nataraj
TI - A Tax on Work for the Elderly: Medicare as a Secondary Payer
JF - National Bureau of Economic Research Working Paper Series
VL - No. 13383
PY - 2007
Y2 - September 2007
DO - 10.3386/w13383
UR - http://www.nber.org/papers/w13383
L1 - http://www.nber.org/papers/w13383.pdf
N1 - Author contact info:
Gopi Shah Goda
Stanford University
SIEPR
366 Galvez St.
Stanford, CA 94305
Tel: 650/736-0480
Fax: 650/723-8611
E-Mail: gopi@stanford.edu
John B. Shoven
Department of Economics
579 Serra Mall at Galvez Street
Stanford, CA 94305-6015
Tel: 650/723-3273
Fax: 650/723-8611
E-Mail: shoven@stanford.edu
Sita Slavov
School of Policy, Government and
International Affairs
George Mason University
3351 Fairfax Drive
Arlington, VA 22201
Tel: 703/993-3171
E-Mail: sslavov@gmu.edu
AB - Medicare as a Secondary Payer (MSP) legislation requires employer-sponsored health insurance to be a primary payer for Medicare-eligible workers at firms with 20 or more employees. While the legislation was developed to better target Medicare services to individuals without access to employer-sponsored insurance, MSP creates a significant implicit tax on working beyond age 65. This implicit tax is approximately 15-20 percent at age 65 and increases to 45-70 percent by age 80. Eliminating this implicit tax by making Medicare a primary payer for all Medicare-eligible individuals could significantly increase lifetime labor supply due to the high labor supply elasticities of older workers. The extra income tax receipts from such a policy would likely offset a large percentage of the estimated costs of making Medicare a primary payer.
ER -